Embracing different approaches for global B2B payments will go a long way towards strengthening the supplier relationship and minimizing payment pain.

International expansion presents many advantages for quickly growing organizations, with multi-sided business models relying more and more on global suppliers. The payee relationship, as a result, becomes a key way to ensure that the flow of goods and services runs smoothly. Ensuring that partners and suppliers are paid on time and efficiently is a strong objective for businesses to maintain relationships.

B2B payments represent a hassle for global organizations as the process can be time-consuming and filled with high costs in fees and manual labor. No one wants to pay to pay, therefore, getting the process right is imperative if you aim to grow the business.

While beginning to expand internationally, the majority of organizations don’t have all the small details figured out, most notably cross-border payments. Embracing different approaches for global B2B payments will go a long way towards strengthening the supplier relationship and minimizing payment pain.

Contending with Cost-Efficient and Varied Payment Methods

One thing to consider for any global supplier network is the variety of payment methods made available, with no one method being perfect for every entity. Based on our internal remittance data, we’ve uncovered one prominent finding: choice in payment methods matter. Suppliers appreciate being able to control and pick a method that is efficient, economical and reliable.

In the US, ACH is the most popular remittance method because it’s inexpensive, reliable and lands in a reasonable time. In contrast, Brazil ranks eChecks (a.k.a. Global ACH or local bank transfers) as the most popular form of payment.

Since wire transfers are costly, they are not the preferred choice of payment for every type of international transaction. However, once transactions reach above $2,500, payees start to opt for wire transfers. We all are aware of how archaic a form of payment checks can be, yet there is also still a need for them in certain situations.

The onboarding process of payees is any organization’s first step in guiding their supplier network into the vast array of potential payment methods. While offering choice can be difficult, the right data can allow businesses to properly remit across various payment methods. Keep in mind, each payment method may introduce reconciliation challenges that the organization will need to address.

Offering Simplified Preferred Currency Payments

Our remittance data also indicates that payees in some countries have a higher propensity for wanting to be paid in their local currency, while others strongly prefer USD. Countries with less stable economies (Nigeria, Honduras, Lebanon) have a stronger preference for USD, while some outliers also have a heavy USD preference like Iceland and Liechtenstein. At the same time, payees in more established EU countries prefer to be paid in local currency.

By offering payees a choice of their preferred currency, businesses can help maintain loyalty and reputation across a range of industries. Often, these partners would have to make the conversion themselves with their banks and incur fees against what they’ve been paid.

The Problem with Holy Grails

With cross-border and B2B payments, the emerging technology of blockchain and cryptocurrency seem to be the latest advancements. If everyone started to accept Bitcoin, the entirety of global remittance problems would vanish overnight, although this fails to address the reality of international payments.

Since Bitcoin is still emerging as a top contender in the payments industry, people have yet to put all their eggs into this one basket. While these new methods ought to be seriously considered, they lack the trust of the public and stability that is most needed for B2B transactions.

Authentic B2B solutions truly embrace the difficulties and diversity of the world, rather than asking an entire society to convert to a foreign way of handling their money. People must have faith in their money and the system which runs our currencies. B2B payments has been considered a long and difficult bridge to cross, but with a variety of different solutions, organizations can bridge that gap without hassle. From there, international expansion becomes attainable, with partner and supplier relationships only growing.

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